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Rule 36 Judgment: The growing problem of one word affrimance by the Federal Circuit

Recently, the Federal Circuit issued a ruling in PCT International, Inc. v. Holland Electronics, LLC. With this decision the Federal Circuit upheld a permanent injunction and jury verdict in favor of PCT International, Inc. finding that competitor Holland Electronics infringed claim 1 of U.S. Patent No. 6,042,422, which is covers a connector for connecting an end of a coaxial cable to another coaxial cable.

The decision took less than a page and a half of text, but only 1 phrase was at all substantive. It simply read: “AFFIRMED. See Fed. Cir. R. 36.” (bold in the original). The remainder of the “decision,” which was labeled as non-precedential, was simply the heading and included the date the order was entered by the Clerk of Court, Peter R. Marksteiner.

This type of decision is what is called a “Rule 36 judgment,” or sometimes simply a “summary affirmance” or “Rule 36 affirmance.”

According to Federal Circuit Rules, a Rule 36 judgment can be entered without an opinion when it is determined by the panel that any one of five conditions exist and a written opinion would not have precedential value. The five conditions are:

The judgment, decision, or order of the trial court appealed from is based on findings that are not clearly erroneous.

The evidence supporting the jury’s verdict is sufficient.

The record supports summary judgment, directed verdict, or judgment on the pleadings.

The decision of an administrative agency warrants affirmance under the standard of review in the statute authorizing the petition for review.

A judgment or decision has been entered without an error of law.

The per curiam decision of the panel in this case did not say which one of the five conditions applied, or if more than one applied, which is typical of a Rule 36 judgment from the Federal Circuit.

When I interviewed Chief Judge Rader the topic of Federal Circuit deliberations and Rule 36 Judgments came up briefly. In relevant part, our discussion was as follows:

QUINN: [C]an you describe how deliberations unfold? And what I mean by that is who decides who writes for the majority, when do you know whether you will write a dissent or write for the majority — sort of the mechanics involved.

RADER: When we come off of the bench, we immediately sit down as a panel of three and convene our conference. The junior-most judge always speaks first, and we do that for two reasons. One is to ensure a kind of judicial independence. The junior judge cannot defer to the more experienced senior judges, but must prepare his or her own independent opinion, which will be presented first in an oral fashion. And there is another reason for it, and that is if the first judge and the second judge differ, then the presiding judge can kind of rock back in his or her chair and listen, let the two judges represent the case and receive the benefits of that revisitation of the issues before making a decision that will decide the outcome of the case.

QUINN: So you pretty quickly after the oral argument the panel has an idea, or maybe even knows, whether there is going to be a split or it is going to be unanimous.

RADER: We do not know for sure. We do not discuss the cases in advance. Now, I’ve worked with everyone on this Court for many years and I generally predict with some degree of accuracy how they are going to vote. So I will often predict when we will have a split, but I am not always accurate on that. The conference is when we really decide and we discuss and come to a resolution. The second order of business, after we have discussed the outcome, is to decide how to resolve it. We decide whether to issue a simple Rule 36 affirmance, which is a standard one-page order that affirms on the basis of the judgment below. The second way of dealing with it is a non-precedential opinion, which is a short five-page opinion written solely for the benefit of the parties that is not binding on the Court in the future. Then there is the standard precedential legal opinion that you see regularly and discuss and which you see in casebooks. By the way, I think we tend to do about one-third of each: one-third of summary affirmance, one-third of non-precedential opinions and one-third of full-blown precedential opinions.

Thus, while it may seem strange to some that the Federal Circuit issue a one-page decision that merely says “AFFIRMED,” relying on this Rule 36 procedural tool is not uncommon and does allow the Court to manage its docket. The Federal Circuit believes these types of decisions provide a critical tool for the court to be able to address all the appeals they receive. Indeed, thanks to the America Invents Act (AIA) and the popularity of post grant proceedings, particular inter partes review (IPR), which is an administrative trial proceeding conducted by the Patent Trial and Appeal Board (PTAB), the Federal Circuit workload is only increasing.

As understandable as the need for a mechanism to quickly resolve cases is for a court as substantially overloaded as the Federal Circuit, there is something fundamentally wrong with using a Rule 36 judgment and providing no insight into even which rationale applied that allowed the Court to invoke Rule 36 in the first place. The parties to these cases have invested a great deal of time and effort to prepare and brief these cases and all they get is a one sentence decision that provides no insight into the Court’s thought process or analysis? That hardly seems fair; it hardly seems in keeping with traditional notions of American justice.

Moreover, in PCT International, Inc. v. Holland Electronics, LLC, the use of a Rule 36 judgment is particularly disconcerting because the Federal Circuit upheld the issuance of a permanent injunction by the district court. Since the Supreme Court’s decision in eBay v. MercExchange over a decade ago it has become increasingly difficult, indeed at times impossible, for victorious patent owners to enjoy exclusive rights once they have prevailed in a patent infringement litigation. Issuing a Rule 36 judgment where the patent owner was victorious and a permanent injunction stands robs the patent owner community of vital Federal Circuit precedent that could otherwise be used to inform district courts on the appropriateness of this extraordinarily important remedy.

Aside from robbing the industry of precedent, how can the public be at all confident that the Court took the time to thoughtfully consider the arguments made if there is nothing more than a naked conclusion reached? This rubs many the wrong way. Since the earliest days of our formalized education we have been told repeatedly to “show your work,” but here at the pinnacle of our Justice system judges are allowed to summarily reject an appeal without as much as an explanation?

This use of Rule 36 judgments is also particularly alarming given how frequently the Federal Circuit relies upon a Rule 36 judgment. Earlier this summer PatentlyO reported that as a result of the AIA the Federal Circuit is now getting more appeals from the Patent Office than from district courts, and that the usage of Rule 36 judgments is increasing both in real numbers and in percentages of disposals. Between January 2016 and May 2016, the Federal Circuit relied upon a Rule 36 judgment to dispose of 43% of appeals from district courts and nearly 50% of appeals from the United States Patent and Trademark Office.

The use of a Rule 36 judgment presents a real and growing problem for the patent community. Indeed, the right to a full, fair and thoughtful appeal seems to be almost completely compromised. This is in part the result of Congress continuing to load cases onto the Federal Circuit docket, and in part because of the Federal Circuit’s penchant for wanting to be a super trial court that reconsiders and reweighs evidence, which is not an appropriate role for an appellate court.

The Author

Gene Quinn
is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. Gene is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments.

Edward HellerAugust 22, 2016 3:54 pm

Gene, also, last year, it appears that upwards of 80-90% of precedential patent decisions were petitioned to the Supreme Court. I find that very interesting.

Vera RanieriAugust 22, 2016 5:43 pm

Below is what I wrote on PatentlyO, with respect to Jason’s article regarding the use of Rule 36.

***

The Federal Circuit’s increasing use of Rule 36 affirmances is concerning.

The use of Rule 36 has significant implications for finality and collateral estoppel. For just one example of the mischief it causes, see 731 F. 3d 1336. As a hypothetical example, a summary affirmance of a judgment of invalidity based on multiple pieces of prior art, would seemingly have no preclusive effect with respect to what that prior art teaches, e.g., should any of the other claims then be asserted, undermining traditional notions of collateral estoppel and the case law arising from Blonder-Tongue.

Although I appreciate the need to handle an increasing workload, I am sympathetic to Judge Reyna’s dissent in TecSec and perhaps, as he suggests, the Federal Circuit may wish to revisit its use of Rule 36, or reconsider how it interacts with collateral estoppel.

***
Similar situations regarding the (in)application of collateral estoppel could easily arise if a defendant is found to be infringing. (E.g., if the patent owner in TecSec had actually wanted the previous claim construction) The use of Rule 36 and its implications on collateral estoppel should concern everyone.

Robert GreenspoonAugust 22, 2016 5:44 pm

When I’m appellee, I love Rule 36. I got two this year. But it’s kind of like eating pure sugar. Sort of unfulfilling, especially since you realize you will have won anyway if the panel had written something.

Hal Wegner posted a note in 2012 with the opposite point of view from Gene’s.

Mr. Wegner cites reasoned policy for why the rule is good for litigants and the court (mainly judicial efficiency), and criticizes those who challenge it. He cites over a dozen failed attempts to get the Supreme Court’s attention on the issue. I respectfully disagree, though, that prior failures alone are a reason not to try. It’s common knowledge that the failure to grant cert should not be taken as any indication of how the Court would rule if it addressed the merits.

Like nearly every practitioner at the CAFC, I’ve been on the wrong end of Rule 36, too. It’s deeply frustrating, but you end up being philosophical about it. Do I really want a detailed explanation of why my client’s appeal lost? But this, of course, is the heart of the problem. The dozen plus challenges that went nowhere notwithstanding, something seems facially unfair about a system that creates its own systematic biases against correction. That is, if the winning condition at the Supreme Court is to learn more detail about why you lost, how many clients would chase that dragon?

Not to mention the fact that, in a rare case, the give-and-take of opinion writing leads to further deliberation. Sometimes circuit judges change their minds. A Rule 36’d appellant will always be left wondering if further study of the client’s position would have led to a different, happier result.

My personal opinion (not of my clients necessarily) is that I would like every Rule 36 affirmance replaced with a 1-5 page nonprecedential opinion. That’s what other circuits do, like the Seventh. Yes, it would add work. But would it really take that much to dictate a few paragraphs to a law clerk, and then circulate for same-day release?

Query — is there any other circuit that uses one-word affirmances?

I gather from Mr. Wegner’s list (at the link above) that challenges to date have been in the nature of calling out Rule 36 as inconsistent with a statute or the Constitution. Those are the challenges that went nowhere. I wonder if the next challenge might try something different — maybe just a pure discretionary invocation of the supervisory authority of a higher court. This would let the petitioner point out the Supreme Court’s own interest in transparent doctrinal development. The Justices cannot possibly be warm to the idea of one (and only one) circuit court depriving them of a look-see into their reasoning, particularly in high-stakes cases like patent cases. Particularly the wayward CAFC.

Which leads to one final quirk about Rule 36 in practice. The Federal Circuit seems to use the rule much more rarely in cases under its veteran’s and government employment-review docket. If anything, those dockets result in an even higher affirmance rate. Maybe the judges think there’s a social benefit to giving more reasoning to individuals who are frustrated claimants for government benefits, while patentees and accused infringers are seen as sophisticated players who just have to go on wondering why they lost.

Night WriterAugust 23, 2016 12:34 am

Maybe the problem is that patent law is so unsettled and the panels often consist of judges with different views of patent law that the only thing they can agree on is the result.

So, rather than fight it out, they simple use rule 36.

Night WriterAugust 23, 2016 7:14 am

So, what people should consider is whether the increased use of Rule 36 is a result of Alice and other absurd cases from the SCOTUS as well as the appointment of Obama of judicial activists to the Fed. Cir.

Rule 36 is really another indication we have moved to a complete equity system where judges just look at the facts and decide based on their gut what should happen. The panels are so divergent that putting together an opinion that they all agree on is getting harder and harder. Really outrageous.

I have no idea how this is ever going to change. My guess is it is going to get worse and worse. The ultimate would be a Rule 36 precedential opinion meaning that we have declared that there is no law and that we are just going to do whatever we feel is right based on being appointed with Google bucks.

Fed. Cir. Bar MemberAugust 23, 2016 3:41 pm

“The Federal Circuit seems to use the rule much more rarely in cases under its veteran’s and government employment-review docket. If anything, those dockets result in an even higher affirmance rate.”

Note the veterans and MSPB cases are most often submitted on their briefs, with no oral argument. I think the opinions in these cases substitute for the discussion that would have occured at oral argument (and that the Rule 36’d cases received).

Overall, however, I think Fed. Cir. Rule 36 is bad. No other circuit does this. If a case is a very clear loser, it should be easy to churn out a 3-page opinion stating why. I suspect a lot of Rule 36 cases are not at all clear losers but, rather, “not important” or, worse “too close.”

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